Wednesday, October 31, 2012

The Special Inspector General for Iraq Reconstruction
(SIGIR) called the Khan Bani Saad Prison in Diyala province, “The single
greatest project failure in the U.S. reconstruction program [in Iraq].” Started
in 2004 as part of a plan to fix the poor conditions and overcrowding in the
prisons in the province, the Khan Bani Saad facility ran into one problem after
another. The original contractor, Parsons Corporation, failed to meet its
schedule, and left a partially built prison when the U.S. government ended its
deal in June 2007. The job was then turned over to two Iraqi and one American
firm that did just as bad a job before their contracts were terminated as well.
What was left was an empty, multi-million dollar building that the Iraqis have
never used.

The Kahn Bani Saad Prison, abandoned by the Iraqis and still half built in 2008 (AP)

The Khan Bani Saad Prison was one of many failures by the
Parsons Corporation to fulfill its work in Iraq. Originally, the Coalition
Provisional Authority (CPA) gave Parsons a contract to build several prisons in northern Iraq. In May 2004, the company signed a $72.9 million contract to construct
Khan Bani Saad to hold 1,800 prisoners. The work was supposed to begin right
away, and be finished by November 2005. Immediately, the project ran into
trouble. First, Parsons didn’t get under way until November 2004, five months
late. Second, there was poor security, and some very shoddy work. The firm
missed its deadline, and then in June 2006, told the U.S. government that the prison would not be completed until September 2008, and cost an additional $13.5 million. That would make Khan Bani Saad over three years behind
schedule. Parsons blamed a lack of security for its problems. In August 2005
for instance, its site manager was killed in his office. The Army Corps of
Engineers, however, which was in charge of the contract, claimed that the
company knew about its work environment before it signed the deal. The Corps
said that Parsons only reported 76 days where it could not work, because of
violence. An officer from the Corps also told the New York Times, that the firm’s
September 2008 finish date was unrealistic, because it had stopped work in
April 2006. As a result, Parsons’ contract with the Corps was cancelled. It
charged Parsons with not following its schedule and running into huge cost
overruns, both of which the U.S. stated were under the company’s control. At
the time, the Army Corps of Engineers found that only 40% of the work had been
finished. Still, the corporation was paid $31 million. At the same time, the
company's $99.1 million contract to build prisons in northern Iraq was
terminated as well. The previous month, it lost a $234 million deal to build
and repair hospitals and health clinics too. In total, Parsons received $333
million for its reconstruction work. $142 million of that was for projects like
Kahn Bani Saad, which had been cut or cancelled. The Special Inspector General
for Iraq Reconstruction found almost all of Parsons’ work to be over budget,
late, and shoddy. The Kahn Bani Saad Prison was not only symbolic of how poorly
it did in Iraq, but of many other companies that signed huge deals to rebuild
the country, but failed to deliver.

The United States was not done with the prison however. In
September 2006, it gave out three new work orders; two to Iraqi companies, and
one to an American one to finish the job Parsons had failed to do. Those were
worth $44 million. In May 2007, an engineering assessment was done of their
work. It found that the facility was still only partially completed, and what
was done was of poor quality. That led the U.S. to terminate the contracts. The
next month, the site was permanently shut down. Only 52% of the prison was
done. The follow up companies proved just as bad as Parsons had been. The
construction was still not up to par, and most importantly Kahn Bani Saad was
not finished three years after the initial deal was signed.

That was not the end of the fiasco the prison had become. On
August 1, 2007, the partially completed facility was turned over to the Iraqi
government. The Deputy Minister of Justice refused to accept it. He said that
his Ministry had no plans to complete or use it. At the same time, $1.2 million
in material, such as fencing, gravel, pipes, etc., were left at the site
unguarded. The Iraqis seemed to know what the Americans were not willing to
accept, Kahn Bani Saad had turned into a running joke. No matter what the U.S.
tried to do with it, the prison was a failure. The Iraqis were right not to
take it since it would still take millions to finish, and what was done, was
pretty much unusable anyway.

In June 2008, members of the Special Inspector General for
Iraq Reconstruction visited Kahn Bani Saad. It found no one at the site since
the Iraqis refused the prison. As a result, most of the $1.2 million in
material left behind was missing. The following SIGIR audit found that some of
the building was done so poorly that demolition was the only solution. It
believed that the prison could never be used as a result. Iraqis seemed to
agree. Local officials in Diyala didn’t know what to do with the empty prison,
and didn’t think it could be repurposed. At the same time, Parsons was ranked
the worst contractor out of seven the Inspector General had investigated. It
called Kahn Bani Saad the biggest waste of money the U.S. had made in its
attempt to rebuild Iraq.

Kahn Bani Saad is a perfect example of the problems that the
United States ran into trying to reconstruction Iraq. The Americans came up
with plans for expanding Diyala’s prisons without consulting Iraqis. They
contracted an American company that appeared completely out of its element. Not
only that, it did a sorry job. When its deal was terminated, three more firms
were brought in who did no better. What was left was a scar on the landscape. A
huge, unfinished prison that cost tens of millions of dollars that could never
be used. Too many projects ended up like Kahn Bani Saad. The U.S. failed at
planning for post-war Iraq before the 2003 invasion. Afterward, there was a
lack of coordination between the various government agencies that were supposed
to carry out the reconstruction effort, not to mention little consultation with
Iraqis over what they wanted and needed. The result was an overall failure to
put Iraq back together again, the repercussions of which are still being felt
to this day.

Tuesday, October 30, 2012

Kenneth Pollack is a longtime
analyst and commentator on Iraq who works for the Saban Center at the Brookings
Institution. His latest article in The National Interest, “Reading Machiavelli in Iraq,” compares the writings of Niccolo Machiavelli on 16th
Century Italian city-states, and the current situation in Iraq. He makes a good
comparison between the two, pointing out that Machiavelli’s Florence was a
budding democracy with deep internal divisions, surrounded by a combination of
weak and powerful states. Machiavelli noted that in those types of situations,
leaders often act out of fear, and make bad decisions that make things worse,
because there are no strong institutions to keep them in check. That’s similar
to Iraq, which is split along political, ethnic, and religious lines, and lies
in the heart of the Middle East with all of its rivalries. It’s also comparable
to Prime Minister Nouri al-Maliki whose recent actions are leading to
accusations that he is becoming an autocrat. Pollack wonders whether Iraq can
pull itself out of this quandary, which is the question of the day for Iraq
watchers.

Premier Maliki sees himself strengthening the state to save the country from the chaos it has faced since the 2003 invasion, while his opponents see those moves as heading towards autocracy (BBC)

In Machiavelli’s The
Prince and Discourses on the First
Ten Books of Titus Livy, he outlined the good and bad sides of politics. In
The Prince, he wrote that in weak
states politicians often see things in zero sum terms, and resort to
subterfuge, because they fear their rivals so much. He called for a prince to
emerge that would save the system from its troubles. In Discourses on the First Ten Books of Titus Livy, he pointed to
ancient Rome as a model for how a republic can be created and maintained.
Kenneth Pollack uses these two examples to help explain the current situation
in Iraq. There, external threats and internal divisions could undermine the
nation’s developing democracy. Iraq’s elite are very similar to those in
Machiavelli’s Florence. There is deep distrust between all of Iraq’s major
parties as shown by the repeated controversies since the 2010 election. First,
Prime Minister Nouri al-Maliki got the courts to rule that any party that could put together the most seats in parliament after the voting was done, rather
than before as had been done previously, could form a new government. Then,
he failed to follow through with the Irbil agreement, which put together the
ruling coalition. That led to a no confidence vote by the Iraqi National
Movement (INM), the Kurdish Coalition, and the Sadrists, and a boycott of the legislature and cabinet by the INM. The premier was able to withstand
all of this, and came out on top each time due to the deep divisions amongst
his rivals. At the same time, he has tried to centralize power in his hands, by appointing commanders within the security forces, and gain control over
government agencies such as the Election Commission, the anti-corruption Integrity Commission, and the Central Bank of Iraq. That has all led to Maliki’s
opponents to call him a dictator, and to compare him to Saddam Hussein. Now
that Maliki has emerged as the victor with no real threat to his power, Pollack
believes this would be the time for him to reach out to the other parties, and
make concessions to assure them that their fears about him are unfounded.
Instead, the prime minister’s conspiratorial mind leads him in the opposite
direction. He doesn’t want to show any weakness, and always seems to see plots against him. Because Iraq has a new political system put together by the
Americans after the 2003 invasion, its institutions are weak, and there are no
real checks and balances that would limit Maliki. Instead, he is systematically
undermining the government’s independence, because he believes that a strong hand
is needed after the years of chaos the country went through. That is leading
the other lists to turn to outside countries for support such as Iran, Turkey,
Saudi Arabia, and the other Gulf States, which in turn only increases Maliki’s
suspicions of their intentions. In an ideal situation, the prime minister could
be taking the high road, and becoming the prince that Machiavelli called for,
and be thinking about the future as he wrote in Discourses on the First Ten Books of Titus Livy. Instead, Iraqi politics
are likely to continue down the dysfunctional path that they have been
following for the last several years, going from crisis to crisis as no one
appears to be above the fray.

In a strong government, institutions are what maintain
stability, and that is what is lacking in Iraq. No matter who is in office, the
various agencies, courts, etc. remain after them. Pollack made a good
observation that it is not Maliki personally that is the problem, but the lack
of those types of pillars in Iraq that allows the prime minister to do what
he’s been doing over the last few years. If another person were in power for
example, they would probably be doing the same, because other bodies such as
the parliament have largely abdicated their oversight of the government. Where
Pollack goes wrong is his constant argument that a U.S. military presence would
have helped Iraq down the right road. Since the Obama administration seems to
follow the Bush administration in seeing Iraq largely in ethnosectarian terms,
it would continue to cause just as many problems as it tried to solve. It also
ignores the growing Iraqi nationalism, which would not allow a continued
foreign presence in the country after eight years of occupation. Today, Iraq is
in a precarious situation. The level of mistrust amongst the elite is growing,
foreign interference is increasing, and politics is mired in one crisis after
another. Rather than a prince emerging to save the state as Machiavelli called
for in Florence almost 500 years ago, Iraq seems to be mimicking its
post-independence period when the premier was largely able to do what he wanted
by playing off his rivals, and forming loose alliances with the possibility
that he could become a strong man like the dictators that followed that time.

Monday, October 29, 2012

The September 2012 issue of the journal Health had two
articles about the medical situation in Iraq’s Fallujah in Anbar province. One
was about infant mortality rates, “Perinatal and neonatal mortality in Fallujah General Hospital, Fallujah City, Anbar Province, west of Iraq,” and the
other was on cancer, “Incidence of cancer in Fallujah above 10 years age with over view of common cancers in 2011.” The two papers both found a worsening
health situation in the city. A likely culprit could be the U.S. invasion and
the intense fighting that took place in Fallujah. However, the reports were
very circumspect to point blame in that direction. “Incidence of cancer” for
instance, believed that the increased cases found in the study could be because
of better diagnosis, reporting, and changes in population, although the
military operations could be a cause as well. Likewise, “Perinatal and neonatal
mortality in Fallujah General Hospital” thought the decade long sanctions
deprived Iraq of the necessary medical equipment and money to maintain the
country’s health system. Whatever the speculation may be, both pieces found
more cancer and infant mortality rates in Fallujah since 2003, which is
troubling enough trends even if the root reason for them remains unclear.

(Wikipedia)

“Incidence of cancer in Fallujah above 10 years age with
over view of common cancers in 2011” found higher rates of the disease in the
city than in the rest of Iraq, and neighboring countries. The study looked at
all cases of cancer from January 1 to December 31, 2011 in Fallujah and three
of its sub-districts, excluding leukemia. This was the first look at the
disease in the city since the 2003 invasion. It got its data from the Fallujah
General Hospital, Al-Janabi Hospital, Amyrea Hospital, private health centers
in downtown Fallujah and three sub-districts, a histopathology lab, private
clinics, and the oncology center in Ramadi. Of the approximate 600,000 people
in those four areas, the report found cancer in 27.2% of them. That broke down
to an incident rate of 96 per 100,000 overall, with 92.6 for men and 99.4 for
women. Fallujah city center had the largest amount of cases at 128 per 100,000,
with the western district of Saqlawiya second at 82. The lowest rate was found
in the eastern district of Karmah at 50 per 100,000. The two most common forms
of the disease reported were breast and lung cancer. The overall rate of 96 per
100,000 was three times higher than that reported for the city in 2002, which
was 34.5 per 100,000. It was also higher than the rate for all of Iraq at that
time, 63 per 100,000. The same was true when comparing Fallujah to some other
countries in the region. In Qatar for instance, the cancer rate was 63.1 per
100,000, 67.2 in Jordan, and 71.7 in Saudi Arabia. Only Iran, at 98 per 100,000
for females, and 103 for males was worse. The study speculated on many possible
reasons for why such a high cancer rate was found in the city. The first was
the two Battles of Fallujah, which took place in 2004. The authors thought that
might be why there were much higher rates in the central area of the city, then
in its sub-districts. At the same time, there were many other possibilities.
Those included better diagnosis, improved reporting, and changes in the
population. With the paper only focusing upon the cases of cancer reported, no
direct correlation could be made with any of those causes.

Cancer Rates In
Fallujah And 3 Sub-Districts 2011

Central Fallujah 128 per 100,000

Saqlawiya 82 per 100,000

Amyrea 66 per 100,000

Karmah 50 per 100,000

Overall 96 per 100,000

Cancer Rates In
Fallujah vs Selected Middle Eastern Countries

Fallujah 96 per 100,000

Iran 100.5 per 100,000

Saudi Arabia 71.7 per 100,000

Jordan 67.2 per 100,000

Qatar 63.1 per 100,000

“Perinatal and neonatal mortality in Fallujah General
Hospital, Fallujah City, Anbar Province, west of Iraq” wanted to determine the
state of Fallujah’s health services after the U.S. occupation by looking at
infant mortality rates. It looked at data collected at the Fallujah General
Hospital’s intensive care unit from January 1 to December 31, 2010. The study
included 290 neonatal deaths and 64 stillbirths. Those established a perinatal
mortality rate of 50.3 per 1,000 live births, and a neonatal mortality rate of
41.5 per 1,000 live births. The latter was lower than the rate reported by the
hospital from 2007-2009, which was 57.3, but higher than the national rate in
2009 of 23 per 1,000 live births. Fallujah’s neonatal mortality rate was also
considerably higher than several neighboring countries including Qatar, 4 per
1,000, the United Arab Emirates, 5 per 1,000, Kuwait and Bahrain, 6 per 1,000,
Oman, 7 per 1,000, Lebanon, 8 per 1,000, Libya, 9 per 1,000, Tunisia and Saudi
Arabia, 12 per 1,000, Jordan and Egypt, 13 per 1,000, Iran, 19 per 1,000, Morocco,
23 per 1,000, Yemen, 32 per 1,000, and Djibouti, 35 per 1,000. Only Sudan at 41
per 1,000 was close. What troubled the authors was that Fallujah General
Hospital is one of the best in Anbar, and is known for its equipment and staff.
Despite that, it still had a very poor record of taking care of pregnant mothers.
In Europe and America, infant mortality rates have gone down, because of better
technology and treatments. The paper believed that the international sanctions
imposed on Iraq in 1990 for its invasion of Kuwait, and the eight-year
occupation by the United States caused a decline in the country’s health
services. Those two events deprived the country of the advances that occurred
in Europe and America, and can now be seen in many nations in the region. What
the authors advocated for was more spending on Iraq’s health care services, so
that it could make up for what it lost over the last twenty years.

Neonatal Mortality
Rate Fallujah vs Selected Regional Countries

Fallujah 41.5 per 1,000 live births

Sudan 41 per 1,000 live births

Djibouti 35 per 1,000 live births

Yemen 32 per 1,000 live births

Morocco 23 per 1,000 live births

Iran 19 per 1,000 live births

Egypt 13 per 1,000 live births

Jordan 13 per 1,000 live births

Saudi Arabia 12 per 1,000 live births

Tunisia 12 per 1,000 live births

Libya 9 per 1,000 live births

Lebanon 8 per 1,000 live births

Oman 7 per 1,000 live births

Bahrain 6 per 1,000 live births

Kuwait 6 per 1,000 live births

UAE 5 per 1,000 live births

Qatar 4 per 1,000 live births

These two papers were important to add scientific data to
Fallujah’s health situation. The city has been the focus of many news reports
for its poor state of affairs, but they were mostly based upon anecdotal
stories. These studies add specific data to that more general picture. They
found large numbers of cancer cases and infant mortalities, which were above
many other countries in the Middle East and North Africa. Those were disturbing
figures. The causes were pure speculation, because there was no attempt to make
a direct correlation between any included in the papers. Many articles have
pointed the finger at the two Battles of Fallujah in 2004. Those could very
well be the reasons why health has deteriorated in the city, but there are
other possibilities as well. The cancer report for instance, pointed to a
decline in spending for health services that occurred in the last twenty years,
while the mortality rate paper also pointed to better reporting and diagnosis.
Further studies will have to be made before a clearer picture emerges of what
has led Fallujah to have such poor health conditions.

Thursday, October 25, 2012

For several years now there have been sporadic reports about the health affects of the U.S. and British military operations in Iraq. Most of these reports have focused upon the city of Fallujah in Anbar province, which witnessed two large battles in 2004. The articles usually involved interviews with doctors and patients who witnessed birth defects since the 2003 invasion, and blamed munitions used against insurgents as the cause. In September 2012, a paper was released, “Metal Contamination and the Epidemic of Congenital Birth Defects in Iraqi Cities” in the journal Bulletin of Environmental Contamination and Toxicology, which did a scientific study of that issue in both Fallujah and Basra. It found high levels of toxic metals in both infant patients and their parents in the two cities, and tried to relate that to the fighting that occurred there. While no direct correlation was made, it provided greater evidence that the health of Iraqis has been affected by the war then the previous news reports did, which were usually based upon anecdotal stories.

The article in the Bulletin of Environment Contamination and Toxicology included two separate studies of the levels of toxic metals found in hospitals in Fallujah and Basra. One involved 56 families who went to the Fallujah General Hospital in Anbar province in 2010. It focused upon hair samples and birth defects amongst those families. It found high levels of lead and mercury, which are neurotoxins, amongst families that suffered birth defects. Lead was five times higher in their hair samples, and mercury was six times higher. The Basra data came from two separate time periods, and relied upon the records of the Al Basra Maternity Hospital. First, an article, “Incidents of Congenital Fetal Anomaly in Al Basra Maternity Hospital” from 1997 was consulted. That covered patients at the hospital from October 1994 to October 1995. It found 1.37 birth defects per 1,000 live births amongst the families studied. That set a pre-2003 control group, which would be compared to patients who visited afterward. The number of birth defects reported at the hospital skyrocketed after the U.S. invasion. In 2003, there were 23 per 1,000 live births, followed by 34 in 2004, 34 in 2005, 44 in 2006, 45 in 2007, 35 in 2008, peaking at 48 in 2009, followed by 29 in 2010, and 37 in 2011. That was an average of 36.5 birth defects per 1,000 live births for that nine-year period. That was 3.5 times higher than the world average of birth defects, and obviously a dramatic jump from the 1994-1995 levels. Again, high levels of toxic metals were found in hair and nail samples amongst the families included in the study that had birth defects. Obviously, a connection was made between the high levels of lead and mercury found amongst those studied and the large number of birth defects that the families suffered. Exposure to those types of metals can lead to miscarriages, birth defects, and infertility. It was also shown that the number of problems with births took off in Basra after the 2003 invasion as compared to the 1990s. Where the study did not provide a direct correlation was the cause of these troubles. Lead and mercury are common ingredients in bullets, and other munitions. However, there are no public records about how many of those armaments or what kinds the U.S. and British used in the fighting in Fallujah and Basra. It can only be speculated then, that the increased toxic metal levels are due to the military operations that occurred, rather than providing direct proof.

“Metal Contamination and the Epidemic of Congenital Birth Defects in Iraqi Cities” provided good, scientific evidence that there have been dramatic increases in birth defects in some of Iraq’s cities. Those families that suffered those problems also had high levels of lead and mercury in their bodies, which were the likely causes. What the paper did not prove was whether the increased amounts of neurotoxins were because of the Iraq War. Speculation would obviously point to the fighting as the cause, but further study needs to be done to make a direct correlation. Unfortunately for Iraq, cities like Basra and Fallujah are finding more and more cases of birth problems, but lack the medical staff and health funding to adequately treat them, let alone try to clean up those areas to prevent them from happening in the future. That means toxicity and birth defects are likely to continue at these aggravated levels.

Wednesday, October 24, 2012

In the last month or two there have been several high-level
meetings between representatives of Iraq’s central and Kurdish regional
governments. Most recently oil officials from Baghdad and Kurdistan met, while
a delegation from the Kurdish ruling parties and the Kurdistan Regional Government (KRG)
travelled to Baghdad to consult with Prime Minister Nouri al-Maliki, amongst others. That might
give the impression that progress is being made in mediating the major disputes
between the two sides. In actuality neither side has budged on the substantive
issues, and there are differences within the KRG as well about how these
negotiations should be conducted.

In September and October 2012, there were four meetings
between Baghdad and Kurdish politicians to discuss the on-going problems they
have with each other. Deputy secretary general of the Patriotic Union of
Kurdistan (PUK) Barham Saleh and the deputy KRG Prime Minister Imad Ahmed representing the ruling Kurdish parties and the regional government respectively headed two separate delegations. They met with Iraqi President Jalal Talabani, the Sadrist bloc in parliament, Prime Minister Nouri al-Maliki, and others. On the same day, October 21, there was also a conference between KRG Natural Resource Minister Ashti Hawrami, Deputy
Premier Rowsch Nouri al-Shaways of the Kurdistan Democratic Party (KDP), and
Deputy Premier Hussein al-Shahristani of State of Law who is in charge of the
country’s energy policy. Likewise, in September, Premier Maliki travelled to Sulaymaniya to meet with President Talabani after he returned from three
months of medical treatment in Germany. The Kurds wanted to go over the
Irbil Agreement, which put the current ruling coalition together after the 2010
election, the 19 points that the ruling Kurdish parties had Maliki sign in
return for their support for his second term in office, the Tigris Operations
Command, which has just been formed in Tamim, Salahaddin, and Diyala provinces,
and the oil industry. These are some of the outstanding issues the KDP and
PUK have with the central government. Baghdad for example, has called all of the oil deals the Kurdistan Regional Government has signed illegal, because it wants control over the country’s resources. This has
complicated attempts to pass a new oil and gas bill as well as the Kurds’
desire to export their petroleum. Likewise, Kurdish President Massoud Barzani
has become increasingly upset with the lack of power sharing within the government, feeling that the prime minister has tried to concentrate power in
his hands. Finally, the ruling parties in the KRG are alarmed that Maliki
recently created a new security command that covers some of the disputed
territories in Iraq, which they hope to eventually annex. All of these
issues have their antecedents in the struggle over the direction Iraq should
take since the fall of Saddam Hussein. Maliki on the one hand, feels like he
has to take a strong hand to keep the country together after all the chaos that
beset it following the 2003 invasion. In contrast, the KDP and PUK have been
pushing for greater autonomy for the Kurdish region, and feel that a strong
government like that which the prime minister hopes for will be an impediment
to their cause. While these get togethers may seem like the two sides are
at least talking with each other to resolve some of these differences, nothing
has changed the current stalemate. In the zero sum game that these officials
view Iraqi politics there is little room to compromise, especially on matters
that are so important such as the country’s oil and gas reserves.

At the same time, the Kurdish delegations have highlighted
the continuing differences within the KRG. A statement by the Kurdish Coalition
in parliament said that the Saleh-Shaways groups stood for all the Kurdish parties. In fact, it only represented the PUK and KDP. Before the parties
arrived in Baghdad, there was a meeting with President Barzani to go over their itineraries. The Change List did not attend, and later criticized the delegations as being partisan. That’s because Change and the two Kurdish
Islamic parties, have been calling for a national strategy for the Kurds formed
by consensus amongst all of the KRG entities. This is in part, because the
opposition has said that the ruling parties only represent their own agendas
when holding meetings with Baghdad. This points to the fact that within
Kurdistan there is a power struggle going on as well. The PUK and KDP have run
the region since the 1990s, and therefore consider themselves the
representatives of the Kurds. They have been very jealous of holding onto their
positions, and therefore resent the demands and attacks made by the opposition.
President Barzani especially, tends to act unilaterally, and expects the other
parties to fall in line behind him. The opposition parties are not always
willing to heed him, and want a real say in Kurdish policy vis-à-vis the
central government.

Iraq’s political parties have been battling for power even
before the 2010 parliamentary elections happened. Many of the arguments that
the KDP and PUK have with Maliki even predate that. The recent meetings between
the two sides are all part of this on-going soap opera. They will not be the
last as Baghdad and Irbil always have time to talk. The question is whether
anything will come of them. This also brings up the Kurdish opposition parties,
as they would like to be involved in the discussions as well. Maliki and the
KRG have been unwilling to budge from their positions. Likewise, the ruling
Kurdish parties have not been willing to take the opposition in Kurdistan that
seriously when it comes to dealing with the central government. Things remain
stalemated as a result, and will likely take many years, and perhaps a change
in leadership in both central and northern Iraq before any real change will
come about.

Tuesday, October 23, 2012

The October
2012 announcement that the governor of the Central Bank of Iraq Sinan Shabibi
and several of his staff were facing arrest warrants came as a surprise to
many. The initial stories said they were being charged with manipulating the
value of the dinar, money laundering, fraud, and other illegal activities. Now
it seems that the investigation only involves the first matter. Whenever
something controversial happens in Iraq, politicians are quick to jump in, and
make their own announcements about the matter before the official story comes
out. That’s why the case against the Bank officials is still unclear, and is
likely the result of political manipulation.

The fact that
Shabibi and the others are being accused of exploiting the value of the dinar
is very suspicious since the Central Bank is widely considered to have saved
the currency from a dramatic devaluation earlier in the year. Buying dollars is relatively easy at Iraqi money exchanges. Starting in December 2011, (1)
the dinar started dropping in value as huge amounts of dollars started being
bought up. Governor Shabibi told the press that demand for American currency had increased 40-50% at the beginning of 2012. The situation got so bad
that the Central Bank was afraid there would be a run on the dinar, so it
started vastly increasing the amount of dollars in circulation. Before, the Bank usually sold around $150 million a week to other banks. That suddenly
jumped to $400 million. Many believed that Iran and Syria were involved, buying
dollars in Iraq to make up for their shortage of hard currency due to
sanctions. Shabibi responded by issuing new rules to tighten the dollar supply.
That seemed to stabilize the dinar by the end of spring. Foreign experts
believed that the actions of the Bank were commendable in this situation. Now
it seems this series of events is at the heart of the charges against the
governor and his staff. That only adds to the questions about the validity of
the investigation. Again, because the premier has been known to oppose the
Bank’s actions, he could just be using this situation to trump up charges to
either get rid of Shabibi or intimidate him, so that he does not stand up to
the prime minister in the future.

What exactly
the case is against Governor Shabibi still seems to be in contention. The
latest reports are focusing just upon the value of the dinar, but whether it’s
increasing or decreasing it is not clear either. What is apparent is that the
actions of the Central Bank were critical in stopping a run on the dinar
vis-à-vis the dollar at the beginning of the year. A credible case can also be
made for the fact that Prime Minister Nouri al-Maliki has attempted to take control of the Bank before, has opposed its plans to revalue the currency, and has wanted to replace Shabibi. The premier has been making a
series of moves in the last year or two to take over all of the country’s
independent institutions. The Central Bank could be just the latest example of
Maliki’s political maneuverings to achieve this goal.

Monday, October 22, 2012

Exxon Mobile
may be taking a dramatic step in its operations in Iraq. In October 2012, it
was reported that the corporation might sell its stake in southern Iraq to concentrate
on its deal with the Kurdistan Regional Government (KRG). This would be a first
where a major oil company has decided to give up on the huge oil fields in
Basra to work in the north instead. At first, Exxon said it wanted to operate
in all parts of the country. Now, it seems that it has grown tired of its
dealings with Baghdad, and might just focus upon Kurdistan.

Exxon may sell its stake in the West Qurna 1 field in Basra to concentrate upon its investments in Kurdsitan (Arabia Oil and Gas)

Exxon seems
willing to sell off its share in its Basra oil field in part, because it is
unhappy with its contract and business environment there. The company owns 60% of a joint venture with Shell and a state-run company worth $50 billion in the West Qurna 1 field in Basra. Exxon has told the United States State
Department of its intentions, and now appears to be looking for a buyer. West
Qurna currently produces 400,000 barrels a day. Exxon has invested over $1
billion in the field since it won an auction for it in 2009. Since then, the
firm has run into all kinds of problems, as have other petroleum businesses in
southern Iraq. That includes the lack of infrastructure, red tape, small
profits, and slow payments. By March 2011 for example, Exxon had increased production at the field by 10%, and could start getting paid by the government. It was owed $470 million by the end of the year, and wanted cash instead of oil as Baghdad had been using. It wasn’t until March 2012 that a
payment agreement was worked out. Exxon also agreed to $1.90 per barrel
remuneration fee once it hit its output mark, which would hardly meet its
costs. That was the company’s own fault, because in the 2009 auction for West
Qurna it put in a bid for the lowest possible fee to win the contract that had
nothing to do with what was feasible. At the same time, the Iraqi bureaucracy
is notorious for being slow and inefficient, because it lacks the capacity and
trained staff to deal with oil contracts. It is also run top down, which slows
all decisions, not to mention that it still has a state-run, command economy
from the Baath period, which makes it hard for the private sector to operate
and flourish.

If Exxon goes
ahead with its plan to get out of southern Iraq it would be a major setback for
Iraq’s oil plans. Baghdad hopes to become one of the largest petroleum
producers in the world. It needs major energy corporations like Exxon to achieve
that goal, because they not only bring large sums of money to invest in oil
fields, but the technology and know how that the government sorely lacks from
years of socialism, along with wars and sanctions that isolated the country for
over a decade. The combination of Exxon’s low bid that offered little room for
profits on the West Qurna field, the bureaucracy in Baghdad, and the Maliki
government’s threatening posture have now soured the firm’s views of southern
Iraq. It appears willing to give up on its work there, and focus just upon
Kurdistan. It joins other big energy companies like Chevron, Total, and Gazprom
that are seeing the potential of the KRG. That places Baghdad in a bind,
because it opposes al of those contracts, and wants sole control over energy
policy. This could force it to compromise with the Kurds, but given the Maliki
regime’s past actions, it will most likely lead to continued opposition to the KRG’s
independent oil plans.

Thursday, October 18, 2012

Iraq’s
Election Commission is an independent body created by the Coalition Provisional
Authority (CPA) to run the country’s voting system. In 2012, the Commission was
struck by two political controversies. First, early in the year, the head of
the Commission, and some of his staff were charged and convicted of graft.
Then, Prime Minister Nouri al-Maliki tried to get more of his followers onto
the Commission by expanding the number of commissioners. That attempt failed,
and recently the Commission chief’s conviction was overturned. These are two
more examples of how the Premier has attempted to assert his control over
government institutions.

Former Election Commission head Haydari was convicted of bribery, but then had that overturned by an appeals court. Whole affair seemed like intimidation tactic by PM Maliki (Niqash)

In early 2012,
the Election Commission was embroiled in a corruption case. On April 12, State of Law parliamentarian Hanan Fatlawi announced that the Commission chief Faraj al-Haydari, and two of his staff members, Karim al-Tamimi and Osama
al-Ani would be arrested on corruption charges. They were said to have given
$130 in bonuses to State Property Commission members in return for government
land. A court found the three guilty, and they received one year suspended
sentences. On October 16, Haydari announced that an appeals court had cleared him of his charges, and overturned his conviction. This was a very
unsettling and unusual turn of events. First, the warrants were made public,
not by an Iraqi court or judge, but by a lawmaker from the prime minister’s list.
Second, Iraq is notorious for corruption. Allegedly giving $130 to some
bureaucrats hardly seemed a serious case, especially when it involved the head
of the Election Commission. The fact that the conviction was overturned might be
a sign that the charges were trumped up to begin with. Haydari told the press that his arrest was an attack upon Iraqi democracy, and aimed at undermining
the independence of the Commission. Although he didn’t say it publicly, he
was likely pointing the finger at Prime Minister Maliki who has been at odds
with the Commission since the 2010 parliamentary elections.

Maliki has
been targeting the Election Commission since the 2010 parliamentary vote. To
the premier’s shock, his State of Law list came in second place in that round
of balloting. He immediately began blaming the Election Commission, accusing
them of helping his rival, the Iraqi National Movement, win the most seats in
the legislature. Commission members were called in for questioning by
parliament afterwards, on what were considered political grounds. In June 2011,
Maliki ordered the Commission to suspend its work, so that it could be
reformed. It refused to comply however, with Haydari saying that it was an
independent body that only answered to parliament. The next month, members of
State of Law attempted to hold a no confidence vote against the Commission on
corruption charges, but failed. Too many of the other parties in parliament
were afraid this was a power grab by Maliki to dismiss the Commission members,
and put in his own people. What this chain of events showed was a concerted
campaign by the premier to pressure the Commission to comply with his will.

Next, the
prime minister attempted to increase the number of commission members, so that
more of his followers could be appointed to it. When the Election Commission’s
term expired in April, members of State of Law suggested that the number of commissioners be expanded from nine to 15. On September 17, parliament
voted down that proposal, and elected eight new members. Ten days later, the final member was appointed. The new chairman was Sarbas Mustafa Rashid who
is a member of the Kurdistan Democratic Party (KDP). This was a defeat for
Maliki. First, he failed to increase the amount of commissioners. Before, four members of the Commission were from the Shiite religious parties, one from
Maliki’s Dawa Party, one from the Supreme Council, one from the Sadrists, and
one from the Fadhila party. That number remained at four on the new Commission,
although Dawa now has two seats, instead of one. That still does not give it
much say. Second, the KDP belongs to Kurdish President Massoud Barzani who is
one of the strongest opponents of the prime minister. His election to be the
new chief meant either a Sadrist or Supreme Council member of the Commission
voted for him, two parties that are nominally aligned with State of Law. Parliament
therefore was not willing to go along with Maliki’s suggestion of expanding the
Commission, and the premier’s own allies were unwilling to give him carte
blanche over future elections either.

For the last
few years, Prime Minister Maliki has attempted to increase his sway over the
government. His moves against the Election Commission were just another
example. He tried to disband the Commission after his list lost the 2010
election, the Commission head was arrested and convicted, and then State of Law
tried to appoint more of its members as commissioners. Even though Maliki
failed at all these moves, it will make the Commission think twice before it
makes a decision that might cross the prime minister. If they do, they could
come under the same type of relentless pressure that the old commissioners
faced. In this game of hardball politics, Maliki is relying upon intimidation
as much as anything. If he can’t win outright, he can always coo and cajole his
opponents, in the hopes that they will relent, and not stand in his way. If
he’s able to do that with the Election Commission it could be a dramatic step
backwards for the Iraqi government since it might have a negative affect upon
future balloting in the country.

Wednesday, October 17, 2012

The latest
controversy in Iraq involves the country’s central bank. In October 2012,
arrest warrants were issued for the governor of the Central Bank of Iraq along
with sixteen of his staff. They were charged with various cases of corruption.
Immediately, people interpreted this as a power grab by Prime Minister Nouri
al-Maliki who has disagreed with some of the bank’s decisions in the past, and
has tried to exert his control over government agencies.

One of the
Prime Minister’s main complaints against the Central Bank has been its attempt
to revalue the dinar. Bank Governor Shabibi has talked about eliminating three zeros from the dinar for years now, and officially announced his plans in June
2011. The premier and his staff disagree with this move. One of Maliki’s
advisers for instance, said that the revaluation should not happen until the
next decade. That led to the cabinet issuing an executive order in April 2012
freezing any changes to the currency. Later it was revealed that the order was
issued directly by Maliki without the cabinet. This led to lots of criticism
with various politicians claiming that the prime minister was attempting to
interfere with the independence of the Bank. Shabibi has talked about the need
for a stronger dinar to reverse decades of keeping the currency weak to
facilitate state control of the economy. Iraq has also begun to earn huge
amounts of cash as its oil exports have increased, which would support
increasing the value of the dinar. Maliki seems to want to maintain the status
quo. With Shabibi out of the way, the prime minister could win this argument.

Some of the
accusations against the Bank officials seem superfluous as well. For one, the Central Bank has demanded that the private banks in the country increase their reserves to $213 million by 2013. The Bank began setting out these rules back in 2009 in a step to increase banking services. Currently, banks
mostly serve the state rather than the public. Shabibi wants to reverse that
process, so that people can get easier loans for example to start businesses or
help with transactions. Private banks need to have larger amounts of reserves
on hand if they are going to increase their lending. A State of Law politician
claimed that these rules have been muddled, but international institutions such
as the World Bank have supported the Bank’s moves. Second, Shabibi and his
associates are being charged with money laundering during the recent run on dollars in currency exchanges across the country, which occurred at the
beginning of the year. A source in parliament however, told Ur News that
bank officials associated with Maliki’s State of Law were involved in
laundering, and ordered Shabibi to take no action against them. Corruption
is rampant in Iraq, and having unscrupulous staff in the Central Bank is not
out of the question. At the same time, the Bank is one of the most respected
institutions in the country, and has worked hand in hand with international
organizations and banks to push economic growth and reform. It would be a huge
surprise then if the Bank governor was personally involved in any illegal
activities.

Given recent
history, it would be no surprise if this move against Governor Shabibi was an
attempt by Premier Maliki to wrest control of the Central Bank. He tried to do
it legally before with the Supreme Court decision. The Bank refused to go along
with that order, and has gotten into a number of disputes with the prime
minister since then. Iraq has weak state agencies after many of them had to be
put back together or created anew after the fall of Saddam Hussein. Maliki has
tried to strengthen the central government and his own hand, by gaining
influence over many of these institutions. That’s why many pointed to him when
the news broke that the Central Bank Governor had an arrest warrant out for
him. It’s impossible to tell how this will play out, but it’s likely to go down
as another example Maliki trying to impose his will over the government.

IRAQ HISTORY TIMELINE

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About Me

Musings On Iraq was started in 2008 to explain the political, economic, security and cultural situation in Iraq via original articles and interviews. If you wish to contact me personally my email is: motown67@aol.com